Archive for May, 2011

It’s 45 minutes long, but this video from the folks at Reason TV is filled with good information on the foolish ideas of central planners who want to control our transportation.

You’ll learn in the first half of the video, for instance, how high-speed rail is like raising baby chicks (you’ll have to watch to understand).

Around the 25-minute mark, you’ll hear about how the Obama Administration wants to divert revenues from the gas tax to all sorts of schemes (such as mass transit) that violate the user-pays principle.

The video doesn’t address the fundamental issue of whether there should be any federal role in transportation, but it’s a great primer about current issues in transportation policy.

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My opinion of politicians is so low that it is always a surprise when one of them does something to cause a radical downward revision, but Newt Gingrich has achieved this dubious distinction. His shallow attempt to score political points led him to attack House GOPers who are trying to reform Medicare to protect America from becoming a bankrupt, Greek-style welfare state.

Ryan’s proposal, which was passed by the GOP-controlled House in April, would have people 54 and younger choose from a list of coverage options and have Medicare make “premium-support payments” to the plan they chose. “I don’t think right-wing social engineering is any more desirable than left-wing social engineering,” Gingrich scoffed in an interview on NBC’s “Meet the Press.” House Republicans, including Speaker John A. Boehner, have stood behind Ryan’s plan, which was the subject of fierce debate at town-hall meetings nationwide. Other Republican presidential contenders have praised Ryan’s political courage without going so far as to endorse the budget blueprint.

As I’ve posted before, I don’t think there is such a thing as a perfect (or completely flawed) politician. The real issue is whether a candidate is willing to balance personal ambition with a sufficient level of concern with the future of the nation. Newt Gingrich has failed this simple test.

But I also want to take this opportunity to raise a question about a candidate who seems to be on the right track, but has a very worrisome blemish on his record. I’ve already said nice things about Herman Cain, but someone needs to ask him whether he still thinks TARP was a good idea, as he wrote back in 2008.

Wake up people! Owning a part of the major banks in America is not a bad thing. We could make a profit while solving a problem. But the mainstream media and the free market purists want you to believe that this is the end of capitalism as we know it. …These actions by the Treasury, the Federal Reserve Bank and the actions by the Federal Depositors Insurance Corporation (FDIC) are all intended to help solve an unprecedented financial crisis.

I’m not implying that this is a kiss-of-death revelation for Cain. Many people thought we had to recapitalize the banking system, but didn’t realize there was an alternative that didn’t involve bailing out well-connected shareholders, bondholders, and managers.

And just as Gov. Pawlenty has recanted on his support for cap-n-trade legislation, the real issue is whether Cain has the maturity to admit a mistake and explain how he made an error on TARP.

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Let’s start with a giant disclaimer that the head of the IMF, Dominique Strauss-Kahn, is accused of forcibly sodomizing a hotel maid and we have no idea whether it’s true. There are even rumors that this is a plot hatched by Nikolas Sarkozy to cripple a potential rival in advance of next year’s French presidential election.

I suppose I could make a comment here about the arrogance of the political class and their view that they’re above the law.

But I’m such a fiscal policy dork that I’m especially outraged by the fact that Mr. Strauss-Kahn gets a gigantic tax-free salary. And then, to add insult to injury, he was staying in a hotel room that costs $3,000 per night!

I rapped Congressman Ron Paul across the knuckles for his disapproval of the Osama bin Laden raid, but I give him kudos for drawing the right conclusion about this sordid story. Here are some excerpts from a Fox News report.

The 2008 Republican presidential candidate told “Fox News Sunday” that Dominique Strauss-Kahn, who was pulled off an Air France flight moments before take-off from New York Saturday and arrested on charges of a criminal sex act, attempted rape and unlawful imprisonment, said the whole course of events “is a bit ironic.” Paul, who makes no secret about his disgust of IMF policies, said Strauss-Kahn demonstrates why the Fund has problems. “These are the kind of people that are running the IMF and we want to turn the world finances and the control of the money supply to them,” Paul said. “That should awaken everybody to the fact that they ought to look into the IMF and find out why we shouldn’t be sacrificing more sovereignty to an organization like that and an individual like he was.”

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Here are two superb articles on the financial crisis.

First, from Peter Wallison at the American Enterprise Institute, we have a piece on the role of government housing subsidies. Since he warned, in advance, that Fannie Mae and Freddie Mac were ticking time bombs, Peter has great credibility on these issues. Here is his key argument, but read the article to see how bad government policy lured people into making dumb choices.

…the financial crisis would not have occurred if government housing policies had not fostered the creation of an unprecedented number of subprime and otherwise risky loans immediately before the financial crisis began.

Second, there’s an article from Roger Lowenstein at Bloomberg that examines why so few Wall Street bigwigs were prosecuted. Here’s his basic premise, but read the entire article to learn how Wall Street executives may have been greedy SOBs, but that’s true when they make money or lose money. What matters, from a legal perspective, is whether someone committed fraud, theft, or some other crime.

…these sentiments imply that the financial crisis was caused by fraud; that people who take big risks should be subject to a criminal investigation; that executives of large financial firms should be criminal suspects after a crash; that public revulsion indicates likely culpability; that it is inconceivable (to Madoff, anyway) that people could lose so much money absent a conspiracy; and that Wall Street bears collective guilt for which a large part of it should be incarcerated. These assumptions do violence to our system of justice and hinder our understanding of the crisis. The claim that it was “caused by financial fraud” is debatable, but the weight of the evidence is strongly against it.

The only thing I will add is that failure is an integral part of a free market system. When critics say that the financial crisis proves that markets don’t work, they obviously don’t understand that capitalism is a process that continuously provides feedback in the form of profits and losses.

So the fact the people and businesses sometimes lose money is to be expected (indeed, capitalism without bankruptcy is like religion without hell). From a public policy perspective, though, it’s important that people are not encouraged to make dumb decisions with government subsidies – or shielded from the consequences of those poor choices with bailouts.

And that’s why government intervention deserves the overwhelming share of the blame for the financial crisis.

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There’s a lot of buzz about a Wall Street Journal interview with Stanley Druckenmiller, in which he argues that a temporary delay in making payments on U.S. government debt (which technically would be a default) would be a small price to pay if it resulted in the long-term spending reforms that are needed to save America from becoming another Greece.

One of the world’s most successful money managers, the lanky, sandy-haired Mr. Druckenmiller is so concerned about the government’s ability to pay for its future obligations that he’s willing to accept a temporary delay in the interest payments he’s owed on his U.S. Treasury bonds—if the result is a Washington deal to restrain runaway entitlement costs. “I think technical default would be horrible,” he says from the 24th floor of his midtown Manhattan office, “but I don’t think it’s going to be the end of the world. It’s not going to be catastrophic. What’s going to be catastrophic is if we don’t solve the real problem,” meaning Washington’s spending addiction. …Mr. Druckenmiller’s view on the debt limit bumps up against virtually the entire Wall Street-Washington financial establishment. A recent note on behalf of giant banks on the Treasury Borrowing Advisory Committee warned of a “severe and long-lasting impact” if the debt limit is not raised immediately. …This week more than 60 trade associations, representing virtually all of American big business, forecast “a massive spike in borrowing costs.” On Thursday Federal Reserve Chairman Ben Bernanke raised the specter of a market crisis similar to the one that followed the 2008 bankruptcy of Lehman Brothers. As usual, the most aggressive predictor of doom in the absence of increased government spending has been Treasury Secretary Timothy Geithner. In a May 2 letter to House Speaker John Boehner, Mr. Geithner warned of “a catastrophic economic impact” and said, “Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover.”

Mr. Druckenmiller is not overly impressed by this hyperbole. The article continues with this key passage.

“Here are your two options: piece of paper number one—let’s just call it a 10-year Treasury. So I own this piece of paper. I get an income stream obviously over 10 years . . . and one of my interest payments is going to be delayed, I don’t know, six days, eight days, 15 days, but I know I’m going to get it. There’s not a doubt in my mind that it’s not going to pay, but it’s going to be delayed. But in exchange for that, let’s suppose I know I’m going to get massive cuts in entitlements and the government is going to get their house in order so my payments seven, eight, nine, 10 years out are much more assured,” he says. Then there’s “piece of paper number two,” he says, under a scenario in which the debt limit is quickly raised to avoid any possible disruption in payments. “I don’t have to wait six, eight, or 10 days for one of my many payments over 10 years. I get it on time. But we’re going to continue to pile up trillions of dollars of debt and I may have a Greek situation on my hands in six or seven years. Now as an owner, which piece of paper do I want to own? To me it’s a no-brainer. It’s piece of paper number one.” …”Russia had a real default and two or three years later they had all-time low interest rates,” says Mr. Druckenmiller. In the future, he says, “People aren’t going to wonder whether 20 years ago we delayed an interest payment for six days. They’re going to wonder whether we got our house in order.”

This is a very compelling argument, but it overlooks one major problem – the complete inability of Republicans to succeed in forcing fiscal reform using this approach.

Here’s a sure-fire prediction, assuming GOPers in the House actually are willing to engage in an eyeball-to-eyeball confrontation with Obama on the debt limit.

o There will be lots of political drama.

o We will get to a point where the federal government exhausts its borrowing authority.

o At that point, either Geithner or Bernanke (or probably both) will make some completely dishonest statements designed to rattle financial markets.

o The establishment media will echo those statements.

o The stock market and/or bond market will have a negative reaction.

o Republican resolve will evaporate like a drop of water in the Mojave Desert.

o The debt limit will be increased without any meaningful fiscal reform.

For all intents and purposes, this is what happened with the TARP vote in 2008. There were basically two choices of how to deal with the financial crisis. The establishment wanted a blank-check bailout, while sensible people wanted the “FDIC-resolution” approach (similar to what was used during the savings & loan bailouts about 20 years ago, which bails out retail customers but wipes out shareholders, bondholders and senior management). Republicans initially held firm and defeated the first TARP vote, but then they folded when the Washington-Wall Street establishment scared markets.

I hope I’m wrong in my analysis, but I don’t see how Republicans could win a debt limit fight. At least not if they demand something like the Ryan budget. The best possible outcome would be budget process reform such as Senator Corker’s CAP Act, which would impose caps on future spending, enforced by automatic spending cuts known as sequestration. Because it postpones the fiscal discipline until after the vote, that legislation has a chance of attracting enough bipartisan support to overcome opposition from Obama and other statists.

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I thought I was done with Osama, but these are too funny not to share.

From Craig Ferguson:

  • The CIA is going through the stuff they found in Osama bin Laden’s compound, including a diary. I didn’t know he had a diary. That is so sweet.
  • Osama bin Laden’s death has been in the news all day. Leftish stations are going, ‘President Obama saves the world.’ Stations on the right are going, ‘Obama kills fellow Muslim.’

From Conan:

  • Al-Qaida has not yet picked a new leader to run their terrorist organization. Apparently, candidates keep losing interest after asking, “What happened to the last guy?”
  • Dick Cheney says he gives Obama high marks on getting bin Laden. He said, “Trust me, I know how hard it is to shoot someone in the face.”

From Jay Leno:

  • Apparently, Pakistan has given the United States permission to interview bin Laden’s wives, as long as we promise not to turn it into a reality show.
  • President Obama said that watching the raid on Osama bin Laden was the longest 40 minutes of his life. Mind you, that’s coming from a guy that has to listen to Joe Biden.

From Jimmy Fallon:

  • Osama bin Laden was killed by Navy Seals yesterday. They did DNA testing to make sure it was Bin Laden. Or as I call it, best episode of Maury Povich EVER.

From David Letterman:

  • The Republicans are so happy about bin Laden they’ve granted President Obama full citizenship.

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I got a few cranky emails after my post suggesting the United States should copy the Baltic nations and implement genuine spending cuts. These less-than-friendly pen pals were upset that I favorably commented on the fiscal discipline of Estonia, Lithuania, and Latvia while failing to reveal that these nations were suffering from high unemployment.

From the tone of this correspondence, my new friends obviously think this is a “gotcha” moment. The gist of their messages is that the economic downturn that hit the Baltic nations is proof that the free-market model has failed, and that I somehow was guilty of a cover-up.

That’s certainly a strange interpretation, especially since I specifically noted that the three nations had suffered from an economic downturn. There’s no questioning the fact that unemployment spiked upwards because of the global financial crisis, which was especially damaging to the Baltics since they all had real estate bubbles.

But let’s deal with the bigger issue, which is whether this downturn is proof that the free market failed (and, for the sake of argument, let’s assume that all three Baltic nations are free market even though only Estonia gets high scores in the Economic Freedom of the World rankings).

If you look at the IMF’s World Economic Outlook Database, it does show that the Baltic nations had serious economic downturns. Indeed, if we look at the data from 2008 to the present, the recession was far deeper in those nations than in Western Europe and North America.

So at first glance, it seems my critics have a point.

But what happens if you look at a longer period of data? The IMF has data for all three Baltic nations going back to 1999. And if we look at the entire 12-year period, it turns out that Estonia, Latvia, and Lithuania have enjoyed comparatively strong growth. Indeed, as seen in the chart, they even surpass Hong Kong.

In other words, the Baltic nations may have suffered larger-than-average economic downturns, but they also enjoyed stronger-than-average booms. And the net effect is that they are now in much better shape than the nations that had smaller recessions but also less-robust growth.

A sophisticated critic may look at this data and say it’s meaningless because convergence theory suggests that middle-income countries almost always will grow faster than rich nations. That’s a fair point, so let’s now compare the three Baltic nations to three other nations that were at the same level of development at the turn of the century.

As you can see, the Baltic nations are doing substantially better than other middle-income nations. By the way, skeptics should feel free to peruse the IMF data to confirm that I didn’t cherry-pick nations to make my point (indeed, I deliberately picked Thailand since it was emerging from the Asian financial crisis and is an example of a nation that enjoyed very good growth in the 2000-2011 period).

The point of this post is not that the Baltic nations are perfect. Estonia is ranked 12th in the Economic Freedom rankings, which is impressive, but Lithuania is 33rd and Latvia is 55th. Those aren’t bad scores considering that these nations are recovering from communist tyranny, to be sure, but Hong Kong isn’t in any danger of being dethroned.

Instead, my argument is that the Baltic nations are making slow but steady progress, and I’m quite confident that the recent decisions by these nations to reduce the burden of government spending will help put them back on an above-average growth path.

That is something America should emulate.

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I’m delighted that Mitt Romney is floundering because of the government-run healthcare scheme he imposed on Massachusetts. Not only did it pave the way for Obamacare, but it’s also a good indicator of the awful, statist, big-government policies he would impose on all of us if he ever entered the White House.

This Henry Payne cartoon from the Detroit News is a pretty good summary of Mitt’s self-inflicted (and much-deserved) political problem.

(h/t: The Corner at Nationalreview.com)

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As a long-time fan of Congressman Paul, I am very disappointed that he recently said he would not have approved the raid on Osama bin Laden’s compound. Here’s an excerpt from The Hill.

Likely GOP presidential candidate Ron Paul said this week he would not have authorized the mission that killed Osama bin Laden, raising concerns about international law. …The likely candidate indicated that to capture bin Laden, he would have worked with Pakistan on a mission like the one that nabbed 9/11 mastermind Khalid Sheikh Mohammad, who was captured by Pakistani intelligence forces and transferred into U.S. custody. …Paul said that international law was an overriding concern.

I’m particularly mystified that he cited “international law” as a reason for his position. I’m not trying to take a cheap shot. Heck, I voted for Ron Paul way back in 1988 when he was the Libertarian candidate for President and I voted for him again in the GOP presidential primary in 2008. But Surely he doesn’t want to cede American sovereignty to the klepto-crats at the United Nations or some other international bureaucracy filled with statists and appeasers?

Herman Cain, on the other hand, has enjoyed a bit of a boost since the debate in South Carolina. I’ve known Cain since the 1990s when he was a member of the Kemp Tax Reform Commission and I was a staffer. On tax matters, Cain has embraced the national sales tax, which may come back to haunt him if he manages to become a first-tier candidate. But he also has proposed a five-part package of incremental reforms, and I was recently interviewed about that set of proposals. With one exception, I was very favorable. Here’s the opening part of the article in the International Business Times.

Herman Cain’s 5-step plan would boost the US economy and create jobs, according to Daniel Mitchell, an economist and senior fellow at the Cato Institute. Mitchell said in the 21st century, globalization has made it easy for businesses to shift their money (investments) and operations (jobs) internationally. Therefore, it’s of the utmost importance for the US to have the right policies and economics in order to win those operations and monies. Mitchell said the Obama administration’s policies do the opposite. Cain’s proposed policies, however, would work to achieve those goals.

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Professor Walter Williams comments on new research showing how the minimum wage is hurting African-American employment.

Last week, two labor economists, Professors William Even (Miami University of Ohio) and David Macpherson (Trinity University), released a study for the Washington, D.C.-based Employment Policies Institute titled “Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases.” During the peak of what has been dubbed the Great Recession, the unemployment rate for young adults (16 to 24 years of age) as a whole rose to above 27 percent. The unemployment rate for black young adults was almost 50 percent, but for young black males, it was 55 percent. Even and Macpherson say that it would be easy to say this tragedy is an unfortunate byproduct of the recession, but if you said so, you’d be wrong. Their study demonstrates that increases in the minimum wage at both the state and federal level are partially to blame for the crisis in employment for minority young adults. …Among the white males, the authors find that “each 10 percent increase in a state or federal minimum wage has decreased employment by 2.5 percent; for Hispanic males, the figure is 1.2 percent. “But among black males in this group, each 10 percent increase in the minimum wage decreased employment by 6.5 percent.” The authors go on to say, “The effect is similar for hours worked: each 10 percent increase reduces hours worked by 3 percent among white males, 1.7 percent for Hispanic males, and 6.6 percent for black males.”

I don’t think that supporters of the minimum wage are racist, but there’s no doubt that they support a policy that has a disproportionately negative impact on blacks. Indeed, the same is true for the school choice issue. African-Americans are especially victimized by crummy government-run schools. Yet the same leftists who generally support higher minimum wages that lead to black unemployment are almost always against school choice, thus condemning minorities to worse life outcomes.

At some point, they should be held morally accountable for the impact of their policies. On both minimum wage laws and school choice, they’re on the wrong side because of the power of union bosses (and all the campaign cash the unions disburse). They’re not motivated by racism, but the result is racist policies.

For more information about the minimum wage, here’s some of what Orphe Divougny had to say in his Center for Freedom and Prosperity video from last year.

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This video reminds me of my days as a grad student at George Mason University, except I would use Lebanon as an example when debating with the anarcho-capitalists in the department.

To be sure, Somalia (or Lebanon) isn’t a fair example of libertarian paradise, just like North Korea isn’t a fair example of big government paradise (as noted by someone in the comment section of the video). But I appreciate clever humor.

Lest anyone think I’m a squishy statist, I would like to be convinced that it’s possible to privatize the legal system and national defense. But I’ve never figured out how it could work.

Not that it really matters. Let’s deal with the 80 percent-90 percent of government that can be eliminated/privatized/devolved and then we can argue about what’s left over.

(h/t: Greg Mankiw)

January 7, 2016 Addendum: The original video was removed by YouTube, but I replaced it with a very similar version.

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I’m often torn between optimism and pessimism about the future. In my cheerful moments, I marvel at the American system and cheer the private sector’s ability to adapt and survive even the stupidest government interventions.

But at other times, I fret that those interventions are eroding American exceptionalism and condemning the nation to irreversible decline.

Today, I’m in a glum mood thanks to a David Brooks column. Here is the passage that has me fearing for the future.

…in 1954, about 96 percent of American men between the ages of 25 and 54 worked. Today that number is around 80 percent. …According to figures from the Organization for Economic Cooperation and Development, the United States has a smaller share of prime age men in the work force than any other G-7 nation. The number of Americans on the permanent disability rolls, meanwhile, has steadily increased. Ten years ago, 5 million Americans collected a federal disability benefit. Now 8.2 million do. That costs taxpayers $115 billion a year, or about $1,500 per household.

Who would have thought that the United States has fallen behind nations like Italy and France in the share of prime-age males in the workforce? And the figures on disability payments are shocking. I’ve actually joked about this issue before (see here and here), but it should horrify many of us that the system is being horribly scammed.

For all intents and purposes, government programs are luring/trapping people into giving up on life. And this attitude presumably gets passed on to family members and friends, with more and more people learning to rip off the system and giving up on the idea of  independent and self-reliant lives with any sort of achievement.

Brooks, not surprisingly, proposes the wrong solution. He suggests a wide range of new government programs. But whatever benefit might be achieved by bribing a few people back into the workforce will be offset by the damage imposed on the people who would be picking up the tab for the added cost.

There’s not a perfect solution for this kind of problem, particularly once the government has already created a class of people with poor work habits and diminished work ethic. But one thing we know for sure is that these programs do not belong in Washington. We are much more likely to get better results if these programs are shifted back to the states so that innovation, experimentation, and competition lead to better approaches – both for taxpayers and especially the people whose lives are ruined by government dependency.

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All the talk of spending cuts in Washington is fictitious. Even the House Republican Study Committee budget allows spending to increase, on average, by 1.7 percent each year for the next decade. The Ryan budget, which critics deride for its “savage” cuts, allows spending to rise by an average of 2.8 percent each year. And Obama’s budget allows spending to climb, on average, by 4.7 percent each year – which is more than twice the projected rate of inflation.

Too bad American policymakers can’t copy the Baltic nations of Estonia, Latvia, and Lithuania. Like the United States, these nations got in fiscal trouble, thanks to the combination of excessive spending and an economic downturn triggered by falling real estate prices.

But unlike the United States, these nations didn’t follow the Keynesian policy of more deficit spending. Lawmakers in the Baltic nations recognized, to borrow the words of Dan Hannan, that “you cannot spend your way out of recession or borrow your way out of debt.”

So they reduced spending. Not in the Washington sense, where politicians get to increase spending and call it a cut because outlays didn’t rise even faster. The Baltic nations imposed real cuts. And not just for one year, but in both 2009 and 2010. Here’s the data from the European Union for the Baltic nations.

Interestingly, it appears that fiscal restraint has been very successful for the Baltic nations. After suffering a steep downturn, economic growth has returned. Amazingly, Estonia is even back to having a budget surplus.

It’s also worth noting that other nations have enjoyed great success with fiscal restraint. This video shows how Canada, Ireland, Slovakia, and New Zealand dramatically reduced the burden of government spending by freezing or capping outlays. Not quite as impressive as what’s happened in the Baltics, but definitely very good compared to what’s been happening in the United States.

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I spoke yesterday at a press event put together by some of the Tea Party groups. Here’s what I said about the debt limit.

I debunked the notion that a higher debt limit was needed to avoid default and explained that the problem is too much spending and that deficits and debt are the symptoms of that profligacy.

During the Q&A session, I talked about Senator Corker’s spending-cap legislation as one possible way of solving the problem.

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Most of us have probably heard the joke about the moronic salesman who admitted to losing money on each sale but was hoping to make it up with higher volume.

E.J. Dionne of the Washington Post is taking this financial approach to a new level. His column today asserts the auto bailout was a success and he celebrates the supposed efficiency and competence of big government.

Don’t expect to see a lot of newspapers and Web sites with this headline: “Big Government Bailout Worked.” But it would be entirely accurate. …Far too little attention has been paid to the success of the government’s rescue of the Detroit-based auto companies, and almost no attention has been paid to how completely and utterly wrong bailout opponents were when they insisted it was doomed to failure. …Government failure gets a lot of coverage. That’s useful because government should be held accountable for its mistakes. What’s not okay is that we hear very little when government acts competently and even creatively. For if mistakes teach lessons, successes teach lessons, too.

So was the auto bailout a success? That’s certainly Dionne’s spin. He sets the bar at a very low level. Basically, if GM is still in business and every so often has a profitable quarter, he wants us to believe the bailout was a giant success.

Libertarians, by contrast, set the bar very high. They would say the bailout is a failure, regardless of GM’s status, because it relied on the coercive power of the government to steer capital in ways that reward failure and exacerbate moral hazard.

The average person presumably is more lenient, and will say the bailout is a success if GM returns to profitability, all the taxpayer money is repaid, and the company isn’t relying on special handouts.

By this “average-person” standard, the GM bailout is a failure. Yes, the company is still in business, but only because of huge handouts, special tax treatment, and the ability to screw creditors. In other  words, GM is sort of like the ethanol industry, kept afloat with other people’s money. Indeed, GM is even worse since (so far as I know) companies like ADM get handouts and special tax loopholes for ethanol, but don’t have the ability to renege on their debts.

So what does all this mean? Nobody disagrees with the notion that a money-losing company can be kept alive forever so long as politicians are willing to provide sufficient levels of other people’s money. And that certainly is a good description of what’s happened with GM, but Dionne wants us to see this as a remarkable success for the wisdom of government intervention.

But let’s do an experiment. If the GM bailout is a success, what would happen if we replicated that “success” over and over again. If we lose money on each bailout, can we make it up on volume?

In E.J. Dionne’s fantasy world, the answer is yes. In the real world, we become Greece even faster.

For those that want more information, my Cato colleague Dan Ikenson has some good analysis about the auto bailout here and here, and Megan McArdle dissects the profitability argument here. Mickey Kaus is a must-read on these issues. You can find his discussion of GM’s profitability here, and his discussion of the company’s IPO here.

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You probably didn’t realize that May 9th was Europe Day. Yes indeed, this is the day that you celebrate European unity, at least according to the bureaucrats of the European Union, who get to celebrate every day since they unify themselves with the tax dollars of European taxpayers.

So what’s the best way of celebrating this historic day? Here are my five options, but feel free to suggest additional choices.

1. Go on strike – This is the probably the leading form of celebration in France and Italy.

2. Spend too much money – This is a favorite activity all over the continent, though the Nordic nations are first among equals.

3. Appease evil – The Germans are doing a good job in this category, criticizing the United States for killing bin Laden.

4. Tax the rich – The supposedly conservative Tories in the United Kingdom have increased the capital gains tax rate and left in place Gordon Brown’s 50 percent tax rate on the evil rich, thus putting them to the left of Obama.

5. Bail out the profligate – Greece and Portugal are  leading the pack in getting reward for bad fiscal policy, but it’s just a matter of time before Belgium and Spain get added to the list.

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I’ve never met Robert Murphy, but he is a reprehensible person. I don’t know if he’s as bad as Michael Wolfensohn, but he’s definitely a sorry excuse for a human being.

For all I know, Mr. Murphy goes to church every day, volunteers at a homeless shelter, reads books for the blind, and picks up litter in the local park. But he’s still a crook being because he thinks it is perfectly okay to steal so long as the government is the middle man.

You can tell me whether I exaggerate after reading these details. Mr. Murphy has been living for 30 years without a lease in a rent-controlled apartment in San Francisco. Every day he remains in the unit, he is stealing value from the owner, Wayne Koniuk, who would prefer to exercise his property rights by letting one of his sons live in the building. Here are the pertinent details from a local news source.

By trade, Koniuk fashions artificial limbs for amputees. By habit, he fits prostheses at no charge for people who cannot pay. This has left him a less-than-wealthy man. But he does have one substantial asset: a Divisadero Street building that his father, Walter, an orthotist, bought in 1970 and gave to his only son in 2001 so Wayne could run his business on the ground floor and Wayne’s adult children would always have a place to live. …Koniuk desperately wants to move his younger son into the building’s other four-bedroom apartment, he cannot. He is exploring legal options. Robert Murphy, who has lived there for 30 years without a lease, remains, paying $525.82 a month. Last spring, Koniuk offered Murphy $45,000 to move out. Murphy’s lawyer demanded $70,000, a sum Koniuk says he does not have. Meanwhile, the city’s Rent Board notified Koniuk that he was allowed to increase Murphy’s monthly rent this year by $2.63.

Not surprisingly, the government intervention that allows Mr. Murphy to steal from Mr. Koniuk is having terrible effects on San Francisco’s housing market.

In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago. …Increasingly, small-time landlords like Koniuk are just giving up. One of his Divisadero Street neighbors has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades. …Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing.

I’ve mocked San Francisco in the past and I certainly enjoy a heaping dose of Schadenfreude when I see the failure of statist policies. But I also hate when big government and greedy interest groups screw over ordinary people. If I was Mr. Koniuk, I would visit this website to get some ideas on how to make life more…interesting…for the thieving Mr. Murphy.

(h/t: Greg Mankiw)

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Let’s start in Washington, where USA Today reports that there are “at least 17,828 federal employees whose annualized salaries totaled $180,000 or more in September 2010.” That’s rather distressing news for taxpayers, but these excerpts from the story provide additional reason for us to be upset.

…their ranks soared from the 805 with annualized salaries of $180,000 or more in 2005. Nearly 90% held “excepted service” jobs, meaning they worked at agencies that set their own qualification requirements and aren’t subject to the appointment, pay and classification regulations that apply to other civil service posts. …Light said he was surprised the federal data showed that 598 SEC lawyers ranked second among the largest employee groups with the top annualized salaries. The financial industry regulator, widely criticized for its failure to detect and stop Ponzi scheme architect Bernard Madoff, “hasn’t been doing its job very well, and yet its lawyers come out on top. That’s a shock, don’t you think?” said Light. Given the national concern with fighting crime, he questioned why federal prosecutors didn’t top SEC lawyers in numbers of highest-salaried attorneys.

Keep in mind, by the way, that the article is examining salaries rather than total compensation. And since bureaucrats generally get benefits that are four times higher than their counterparts in the productive sector of the economy, the gap between the bureaucratic elite and the serfs who pay their salaries is even larger than these figures suggest.

But at least the overpaid federal bureaucrats are mostly doctors and lawyers, so there’s at least some argument for high levels of compensation. If you want to read something truly outrageous, let’s travel to Newport Beach, California, where the city’s lifeguards are bleeding taxpayers in an obscene fashion.

…the city’s full-time lifeguard force has finally come under scrutiny. Next week the city council will decide if cuts are needed to the full-time lifeguard force where last year the top earner received $211,000 in pay and benefits, including a $400 sun protection allowance. In 2010 all but one of the city’s full-time lifeguard staff had annual compensation packages worth over $120,000. Not bad pay for a lifeguard – but what makes these jobs most attractive is the generous retirements. These lifeguards can retire at age 50 with full medical benefits for life. One recently retired lifeguard, age 51, receives a government retirement of over $108,000 per year—for the rest of his life.

The examples in this post are especially egregious, but the key thing to keep in mind that compensation levels for bureaucrats (at all levels of government) are far too high. I’ve posted this video before, but I’ll embed it again for folks who want to see some of the key statistics to prove that the government workforce is too large and paid too much.

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I recently took part in a symposium on “The Budget Deficit and U.S. Competitiveness.” Put together by the Council on Foreign Relations, five of us were asked to concisely explain our thoughts on the issue.

Here’s some of what I wrote:

Excessive government spending can slow growth by diverting labor and capital from more productive uses. Punitive tax rates can hinder prosperity by discouraging work, saving, investment, and entrepreneurship. And large budget deficits can undermine competitiveness by “crowding out” private capital and building negative expectations of future tax increases. In extreme cases, high budget deficits can destabilize entire economies, either because a government resorts to the printing press to finance deficits or because investors lose faith in a government’s ability to service debt, thus leading to a sovereign debt crisis. …The best way to control this red ink while also boosting competitiveness is to cap the growth of government spending. If revenues increase by an average of 7 percent each year (as the president’s budget projects, even without tax increases), then we can reduce deficits by making sure spending grows by less than 7 percent annually.

Not surprisingly, the other participants in the symposium did not share my views.

Maya MacGuineas of the Committee for a Responsible Federal Budget wrote that, “Revenues will have to go up to deal with the deficit” and also wrote that, “Consumption taxes could help promote savings; a carbon tax could help lead to improved energy policies.”

She’s wrong on consumption taxes, by the way. A consumption tax hits both current consumption and future consumption, so the incentive to save is left unaltered. And if you want to get technical, something like a VAT would be anti-savings since it would reduce after-tax income for households, resulting in less consumption and less saving.

Greg Ip of the Economist (I’m always mystified some people think that magazine is for less government) wrote that “…taxes will have to rise” and specifically called for, “a broad-based consumption tax or, more narrowly, by raising the gasoline tax.”

While I disagree with Maya and Greg, I should point out that they are not nearly as misguided as  Obama, Reid, Pelosi. Unlike those politicians, both of them explicitly warn against class-warfare tax increases such as higher marginal tax rates on work, saving, investment, and entrepreneurship. These are the types of tax increases that have the worst impact on economic performance.

On other hand, a consumption tax (i.e., a value-added tax) would be the worst possible result since such a levy would be a giant money machine for big government. So while a VAT does not do as much damage, per dollar raised, as higher income tax rates, it would impose considerable damage by financing much bigger government. So McGuineas and Ip aren’t too bad on economics, but they’re really bad on political economy.

This video explains why a VAT is a terrible idea and the other video looks at the empirical evidence against big government.

Sebastian Mallaby of the Council on Foreign Relations and C. Fred Bergsten of  the Peterson Institute for International Economics also took part in the symposium. But they only wrote that deficits are a threat to competitiveness and did not suggest any solutions.

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Not quite as good as the Facebook/Osama joke from yesterday, and perhaps not as good as the Dick Cheney/Osama jokes from earlier in the week, but still very much worth sharing.

By the way, I better stay out of Germany. I noted the other day that German politicians were attacking Chancellor Merkel because she made a politically incorrect statement approving of bin Laden’s death. That’s apparently not just a faux pas in German society, but also a legal mistake. A German judge has filed a criminal complaint against Ms. Merkel for “endorsing a crime.”

That Judge must be a class-A DB. What a spectacularly pathetic example of moral preening.

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The Labor Department released its latest job numbers today and they remind me of Clint Eastwood’s 1966 classic, “The Good, the Bad, and the Ugly.”

The good news is that the economy created 244,000 new jobs, the biggest gain in almost one year. And the jobs were in the productive sector of the economy rather than government, so the added employment means more taxpayers rather than more tax-consumers.

The bad news is that the jobless rate increased to 9.0 percent, up from 8.8 percent last month. This means that the number of people looking for work is increasing at a faster rate than the number of jobs being created.

The ugly news, at least from the perspective of the Obama Administration, is that the latest data is yet another piece of evidence showing that the White House was grossly mistaken when it claimed that bigger government would translate into better economic performance.

The blue line in this chart shows the Administration’s prediction of what would happen to unemployment if the so-called stimulus was enacted. The dots represent the actual unemployment rate.

As you can see, the unemployment rate is easily more than two percentage points higher than the White House said it would be at this time.

Administration apologists respond by moving the goal posts, asserting that the original prediction underestimated the economy’s weakness and the unemployment data would have been even worse in the absence of more wasteful spending.

Since economists are lousy at predicting the future, that’s a legitimate argument.

But is it an accurate argument? Since there’s no parallel universe where we can conduct policy experiments, there’s no way of proving which side is wrong. Nonetheless, this chart from the Minneapolis Federal Reserve Bank is rather revealing. It compares employment numbers after the deep recession of the early 1980s with the employment numbers from the recent deep recession.

Perhaps I’m biased and reading this chart incorrectly, but it certainly seems as if Reaganomics generated better results than Obamanomics. Maybe it’s time to realize that government is the problem, not the solution?

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Or is it Usama bin Laden? Whatever, at least he doesn’t have 112 different ways of spelling his name, like the dirtbag from Libya.

Anyhow, lots of people really liked the previous post with bin Laden jokes, so I’m responding to market demand with more jokes about Osama.

From Jay Leno:

  • President Obama has done something that no one else has been able to do. He got Donald Trump to shut up.
  • Apparently, Osama bin Laden was killed with money and phone numbers sewn into his clothing. So we got him right before he left for summer camp.
  • Bin Laden was buried at sea. Or as Dick Cheney calls it, “the ultimate waterboarding.”
  • They say bin Laden lived in his compound with nine women and 23 children. I’m surprised the guy didn’t shoot himself in the head.

From Conan:

  • Trump said that he hoped bin Laden suffered a lot. It looks like he got his wish, because the CIA said bin Laden spent his last hour watching “Celebrity Apprentice.”
  • At the time of his death, bin Laden had sewn the equivalent of $740 into his clothing. Experts say his next plan was to launch a major attack, or to rent a one-bedroom apartment in Chicago.
  • Marijuana plants were found near bin Laden’s compound, which explains why bin Laden’s last words were, “Dude . . . “

From David Letterman:

  • It was so nice in New York City today that Navy SEALs raided a Jamba Juice.
  • Osama bin Laden lived in a compound with all of his wives for the last few years. So I guess he did suffer.

From Jimmy Kimmel:

  • The CIA says bin Laden’s last words were, “Are you guys here about the dishwasher?”

From Jimmy Fallon:

  • Rush Limbaugh said yesterday that Obama never would have tracked down bin Laden if it weren’t for George W. Bush’s policies. Although in fairness, Obama never would have even been elected if it weren’t for George W. Bush’s policies.

Last but not least, whoever created this Facebook joke is very clever.

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We have two completely unrelated topics from Germany and France, but both fit in the broader theme of Europe’s gradual, self-inflicted suicide.

Let’s start with the Germans. I’m not a big fan of the country’s Chancellor, Angela Merkel. She is supposedly a conservative, but she certainly hasn’t done much to reduce the burden of government. But I give her credit for making the rational and moral observation that, “I’m glad that killing bin Laden was successful.”

Based on the reaction, however, you would think she had come out in favor of torturing puppies. Here are some excerpts from a story on a German news site.

Katrin Göring-Eckardt, Green party MP, Bundestag vice president and leading member of the Evangelical Church of Germany, told the Berliner Zeitung she was glad bin Laden was no longer leading a terrorist group. “But you can’t be happy about his death,” she said. On Monday, Merkel told reporters that bin Laden’s death at the hands of US forces was “good news.” “I’m glad that killing bin Laden was successful,” she said. The criticism of Merkel’s comments came not only from political opposition, but from her own party, echoing discomfort expressed by some observers at the emotional, celebratory reaction of many Americans and foreign politicians around the world after bin Laden’s killing. Siegfried Kauder, a member of Merkel’s conservative Christian Democratic Union (CDU), slammed her remarks, calling them reminiscent of something a person would say in the “middle ages.”

I’m not an expert on Germany’s political system and I’m certainly not a close observer of the nation’s various political figures, so I have no idea if these critics really believe the things they said. But does that really matter? It’s a bad sign if you have a nation where the political elite actually feel sadness that a monster is dead. And it’s a bad sign if you have a nation where the political elite think they should act like it’s unfortunate that a monster is dead.

Let’s now shift to the French. There’s been a lot of attention paid to bailouts of Greece, Ireland, and Portugal, which certainly is appropriate since all of us should be outraged that we are paying (via the IMF) to reward profligate politicians and special-interest groups.

Unfortunately, there are more nations in fiscal trouble, which probably means even more bailouts. Most people think Spain, Italy, and Belgium are next in line, but France is a dark-horse contender in the race to fiscal crisis. Read some of what Matthew Lynn wrote in his Bloomberg column.

It is increasingly politically unstable, its debt position is getting worse all the time, it is losing competitiveness against Germany, and it shows little willingness to change. Those are all good reasons for the bond markets to make France the next battleground. …France’s debt position is getting worse all the time. In 2010, the nation ran the fifth-biggest budget deficit in the euro area, at 7 percent of GDP. It was beaten only by Greece, Portugal, Ireland and Spain — hardly great company. Its stock of outstanding government debt hit 81 percent of GDP in 2010. That figure will reach 90 percent this year and 95 percent in 2012, according to London-based consulting firm Capital Economics. Italy has more outstanding debt — 119 percent of GDP in 2010 — but it isn’t adding to the pile the same way France is. What the markets really look at is the direction you are traveling in — and in the case of France, it isn’t good. …Sarkozy came to power promising to shake up the economy. He delivered little. …it is hard to believe that the euro crisis will end with the bailout of Portugal. Other countries are going to get caught in the crossfire. When you look around for the next candidate, France has what it takes to be the next blowup.

I still think Spain goes bust first, but Lynn makes a compelling case. Bad things are bound to happen when politicians expand the burden of government, increase tax burdens, and expand dependency. And that’s been the pattern in France, regardless of who’s in charge.

Notwithstanding my snarky title, the purpose of this post is not mock the Germans and the French. I’m certainly not averse to some good-natured ribbing of foreigners, but there’s a serious point to be made. Moral relativism and big government are signs of societal decay, and my real concern is that America is slowly heading down the same path as Western Europe.

Let’s learn from Germany and France and avoid making the same mistakes.

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Martin Feldstein’s on a roll, but not in a good way. Earlier this week in the Wall Street Journal, he advocated throwing in the towel on reforming Social Security into a system of personal retirement accounts. Today, in the New York Times, he endorses big tax increases.

Rather odd positions for someone who served as Chairman of President Reagan’s Council of Economic Advisers. The Gipper must be rolling in his grave.

To be fair, when compared to Obama’s tax-hike plan, Feldstein wants to raise taxes in ways that impose much less damage on the economy. Obama wants to raise tax rate on productive behavior, thus discouraging work, saving, investment, and entrepreneurship. Feldstein, by contrast, wants to cap various tax preferences.

Reducing the budget deficit and stopping the explosion of our national debt will require more tax revenue… But the need for more revenue needn’t mean higher tax rates. …tax revenues can be increased substantially by limiting the deductions, credits and exclusions that are essentially government spending by another name. …such tax expenditures create incentives for wasteful borrowing and spending; they have been factors in the mortgage crisis and the rising cost of health care. …here is a way to curb this loss of revenue without eliminating any individual deduction: limit the total tax saving for any individual to a maximum percentage of his total income. …What’s the result? Taxpayers with incomes of $25,000 to $50,000 would pay about $1,000 more in taxes; those with incomes of more than $500,000 might pay $40,000 more. The cap would affect more than 80 percent of taxpayers. Although they would continue to benefit from the mortgage deduction, the health insurance exclusion and other tax expenditures, their tax savings would not increase if they took out a larger mortgage or a more expensive insurance policy. …a 2 percent cap on tax expenditures in 2011 would raise tax revenue by $278 billion — nearly 30 percent of total projected income tax revenue for this year. The extra revenue would increase over time, reaching nearly half of the projected future fiscal deficits.

I’m not a fan of tax preferences. I agree with much of Professor Feldstein’s argument about the inefficiency and distortions that are created when government plays industrial policy with the tax code.

But there are good ways and bad ways of addressing the problem. If Professor Feldstein was proposing to cap or eliminate tax preferences as part of a plan that also lowered tax rates, that would be great news.

Unfortunately, Feldstein is proposing to cap tax preferences in order to funnel more money to Washington. But giving more tax revenue to politicians and bureaucrats, in the words of P.J. O’Rourke, would be like giving whiskey and car keys to teenage boys.

The big problem with Feldstein’s approach is that any source of additional revenue will ease up the pressure to restrain government spending. There are several budget plans, such as Congressman Ryan’s proposal and the House Study Committee plan, that would significantly improve America’s fiscal position by restraining the growth of federal spending. But these pro-growth initiatives will have zero chance of getting enacted if politicians think more revenue is forthcoming.

America’s fiscal problem is too much spending, not insufficient revenue.

Yes, the tax code is riddled with terrible provisions that are both corrupt and economically inefficient. But those provisions should be eliminated as part of tax reform – not as part of a plan to give politicians an excuse to prop up big government.

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As a taxpayer, I’m not overly happy that we still have an Indian Affairs Committee. And I’m definitely not happy that the Committee is wasting my money by holding a hearing about stereotypes. And I’m rolling my eyes that some folks on the Committee are upset that Osama bin Laden was given the code-name Geronimo.

Here’s what ABC is reporting.

The Senate Indian Affairs committee will hold a hearing Thursday on racist Native American stereotypes, a hearing that will now also address the Osama bin Laden mission and the code-name Geronimo. While the hearing was scheduled before the mission, a committee aide today said the linking of the name Geronimo with the world’s most wanted man is “inappropriate” and can have a “devastating” impact on kids.

I’m not saying that the Geronimo was the best choice in the world. I’m sure, for instance, that the CIA (or Defense Department, or whoever) would understand that a negative-sounding Middle-Eastern code-name (such as “Towel-head”) would be completely inappropriate.

Likewise, I doubt anybody in the government would use an African-American-sounding code-name, particularly when referencing a villain.

In other words, some common-sense sensitivity is a good thing.

But is there any reason why the Chairman of the Committee, Senator Akaka of Hawaii, can’t make a quiet phone call and say, “I know you guys didn’t mean anything, but in the future please stay away from using code-names that link bad guys to American Indians.”

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As I have explained elsewhere, tax increases are a bad idea – unless you favor bigger government.

And I’ve already added my two cents to the tax debate between Senator Coburn and Grover Norquist regarding the desirability of higher taxes.

So it won’t surprise anyone to know that I fully agree with this new video from the Center for Freedom and Prosperity, which offers seven reasons why higher taxes are a bad idea.

The video is narrated by Piyali Bhattacharya of Young Americans for Liberty, and here are her seven reasons.

  1. Tax increases are not needed
  2. Tax increases encourage more spending
  3. Tax increases harm economic performance
  4. Tax increases foment social discord
  5. Tax increases almost never raise as much revenue as projected
  6. Tax increases encourage more loopholes
  7. Tax increases undermine competitiveness

I think reasons #1, #2, #3, and #5 are the most powerful.

To a considerable degree, my video on balancing the budget makes the same point as reason #1 about why higher taxes are unnecessary. Simply stated, balancing the budget merely requires a modest degree of fiscal discipline, such as capping spending so it only grows 2 percent per year.

And if tax increases are not needed to balance the budget, then the only purpose they serve is to facilitate a bigger burden of government spending, which is why I like reason #2.

And reason #3 is standard economic analysis, making the common-sense point that if you punish something, you get less of it. This is why it is so misguided to impose higher tax rates on work, saving, investment, and entrepreneurship.

Last but not least, reason #5 is just another way of saying that the Laffer Curve is real, as I explain in this tutorial.

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The late-night comics didn’t even let Osama’s body get warm (oops, I mean cold) before having some fun. Good!

From Jay Leno:

  • The good news: Osama bin Laden is dead. The bad news: there is no bad news.
  • Osama bin Laden was apparently shot twice in the face. It looks like Dick Cheney may have been involved.

From David Letterman:

  • Did everyone enjoy the Osama bin Laden season finale?
  • There’s already been some trouble for Osama bin Laden in the afterlife. There was a mix up and he was greeted by 72 vegans.

From Craig Ferguson:

  • Politicians on both sides are equally happy. Dick Cheney said he hasn’t been this happy since he saw the YouTube video of the girl throwing puppies into the river.
  • Apparently, members of al-Qaida are online slamming the U.S. I don’t understand why they’re so upset. Everyone in al-Qaida just got a promotion.

From Jimmy Kimmel:

  • I would like us to kill bin Laden every Sunday night. It makes for a much brighter start to the week.
  • After all the talk about caves, bin Laden was hiding in a million-dollar mansion in Pakistan. The CIA became suspicious when they learned there was a million-dollar mansion in Pakistan.
  • I just want to point out that “buried at sea” means “dumped in the ocean.” This could be the best Shark Week ever.

From Jimmy Fallon:

  • Oddly enough, bin Laden’s last words were, “I hope you at least use this to interrupt ‘Celebrity Apprentice.’”
  • Microsoft is bringing back “Clippy,” the cartoon paper clip that used to pop up in Word documents. Apparently he’s been hiding in an upscale suburb of Pakistan.

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I was excited when I saw that Professor Martin Feldstein of Harvard University had a column in yesterday’s Wall Street Journal entitled, “Private Accounts Can Save Social Security.” This is great, I thought, another person advocating the kind of pro-growth, pro-freedom reform which has taken hold in about 30 nations all over the world.

Imagine my disappointment, then, when I read the column and discovered that Feldstein had unfurled the white flag. Instead of genuine reform, which would allow workers to shift their payroll taxes into personal retirement accounts, he wants everyone to remain trapped in the current system and then require individuals to pay extra into some sort of retirement account.

Social Security taxes are not to be invested in the stock market… Here’s how such a system might work. Each individual would designate a broad-based mutual fund from a large list of funds approved by the government. The designation could be done on the individual’s annual tax return and could be changed once a year. Employers and the self-employed would send an additional few percent of wages to the Social Security Administration each month in addition to the current payroll tax. The Social Security Administration would then forward those dollars to the mutual fund chosen by the individual. …The automatic extra payroll deduction could start with a less disruptive 1% or 2% and grow as high as 5%. Since every individual would have the option of requesting a refund of that payroll deduction on the following year’s income-tax form, the extra saving is strictly voluntary.

The only good news is that Feldstein would allow workers to recapture the money they are forced to put in these new accounts, so technically this is not an Obamacare-style mandate. Or, perhaps the right description is that it is a mandate, but with an escape hatch.

The right approach is to let workers shift their payroll taxes into a personal account. This video describes why this type of reform is the right approach.

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Whoever came up with this picture deserves a lot of credit. It’s amusing and it gets across exactly the message Obama wants.

Obama will probably enjoy a big bump in his popularity. But that’s fine with me. He deserves it.

I’ll go back to criticizing his economic policy soon enough, but at this moment I’m proud of America’s Commander-in-Chief.

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It was wonderful to wake up this morning in Austria and learn that Osama bin Laden is dead.

I’m proud of America’s special forces for their courage and ability. And I tip my hat to the Obama Administration for nailing OBL rather than capturing him (at least I hope that was the plan). Apparently the CIA Director got to watch live from Langley and see the loathsome maggot meet his long-overdue fate. Very cool.

Time for some old-fashioned patriotism.

And here’s one of the most touching renditions of America’s national anthem I’ve ever seen, performed at Buckingham Palace after 9-11.

Let’s enjoy this moment.

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